1-1 AN ACT 1-2 relating to assistance to certain volunteer fire departments and to 1-3 the imposition of an assessment on certain insurers to finance that 1-4 assistance. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 614, Government Code, is amended by 1-7 adding Subchapter F to read as follows: 1-8 SUBCHAPTER F. RURAL VOLUNTEER FIRE DEPARTMENT ASSISTANCE PROGRAM 1-9 Sec. 614.071. DEFINITIONS. In this subchapter: 1-10 (1) "Director" means the director of the Texas Forest 1-11 Service of The Texas A&M University System. 1-12 (2) "Fund" means the volunteer fire department 1-13 assistance fund. 1-14 (3) "Program" means the Rural Volunteer Fire 1-15 Department Assistance Program. 1-16 (4) "Service" means the Texas Forest Service of The 1-17 Texas A&M University System. 1-18 (5) "Part-paid fire department" means a fire 1-19 department operated by its members, some of whom are volunteers and 1-20 not more than 20 of whom are paid. 1-21 (6) "Volunteer fire department" means a fire 1-22 department operated by its members, including a part-paid fire 1-23 department, that is operated on a not-for-profit basis, including a 1-24 department that is exempt from federal income tax under Section 2-1 501(a), Internal Revenue Code of 1986, by being listed as an exempt 2-2 organization in Section 501(c)(3) of that code. 2-3 Sec. 614.072. ADMINISTRATION OF PROGRAM. (a) The Texas 2-4 Forest Service shall administer the program established under this 2-5 subchapter, and the director may adopt rules necessary to assist 2-6 volunteer fire departments in paying for equipment and training of 2-7 personnel. 2-8 (b) The service may employ staff to administer the program. 2-9 (c) The director shall: 2-10 (1) determine reasonable criteria and qualifications 2-11 for the distribution of money from the volunteer fire department 2-12 assistance fund; and 2-13 (2) establish a procedure for reporting and processing 2-14 requests for money from the fund. 2-15 (d) A volunteer fire department may not be denied assistance 2-16 from the fund solely because the department receives funds from a 2-17 political subdivision. 2-18 (e) The director shall prepare an annual written report on 2-19 the activity, status, and effectiveness of the fund and shall 2-20 submit the report to the lieutenant governor, the speaker of the 2-21 house of representatives, and the comptroller before November 1 of 2-22 each year. 2-23 (f) Any assistance or benefits provided under this 2-24 subchapter to a volunteer fire department or a firefighter who is a 2-25 member of a volunteer fire department may not be considered 2-26 compensation, and a firefighter receiving assistance under this 2-27 subchapter may not be considered to be in the paid service of any 3-1 governing body. 3-2 (g) Administration costs associated with the program during 3-3 a state fiscal year may not exceed seven percent of the total 3-4 revenue collected from the assessment under Article 5.102, 3-5 Insurance Code, during the previous fiscal year. 3-6 Sec. 614.073. REQUESTS FOR ASSISTANCE. (a) A request for 3-7 assistance from the fund shall be submitted to the director. 3-8 (b) On receiving a request for assistance, the director 3-9 shall determine whether to provide assistance and the amount of the 3-10 assistance to be provided, if any, based on the criteria developed 3-11 under Section 614.072. A written copy of the decision shall be 3-12 sent to the requestor. 3-13 Sec. 614.074. FUND. (a) The volunteer fire department 3-14 assistance fund is an account in the general revenue fund and is 3-15 composed of money collected under Article 5.102, Insurance Code, 3-16 and contributions to the fund from any other source. 3-17 (b) Money in the fund may be used only for a purpose under 3-18 this subchapter. 3-19 SECTION 2. Subchapter M, Chapter 5, Insurance Code, is 3-20 amended by adding Article 5.102 to read as follows: 3-21 Art. 5.102. ASSESSMENT FOR RURAL FIRE PROTECTION 3-22 Sec. 1. DEFINITIONS. In this article: 3-23 (1) "Insurer" means an insurer authorized to engage in 3-24 business in this state, including a stock company, mutual, farm 3-25 mutual, county mutual, Lloyd's plan, or reciprocal or 3-26 interinsurance exchange. 3-27 (2) "Net direct premium" means the gross direct 4-1 premium written and reported by an insurer on annual financial 4-2 statements on: 4-3 (A) policies of: 4-4 (i) homeowner's insurance; 4-5 (ii) fire insurance; 4-6 (iii) farm and ranch owner's insurance; 4-7 (iv) private passenger automobile physical 4-8 damage insurance; and 4-9 (v) commercial automobile physical damage 4-10 insurance; and 4-11 (B) the nonliability portion of a commercial 4-12 multiple peril policy. 4-13 Sec. 2. APPLICABILITY. This article applies only to an 4-14 insurer that writes an insurance policy described by Section 1(2) 4-15 of this article. 4-16 Sec. 3. ASSESSMENT. (a) The comptroller shall assess all 4-17 insurers in an amount that totals $15 million for each 12-month 4-18 period. Each insurer shall pay a portion of the assessment in the 4-19 proportion that the insurer's net direct premiums for the period 4-20 for which the assessment is made bear to the aggregate net direct 4-21 premiums written in this state for that period. 4-22 (b) The comptroller shall assess the insurers on or before 4-23 September 1 of each year. 4-24 (c) An insurer shall pay the amount assessed under this 4-25 section on or after the 60th day after the date the comptroller 4-26 assesses the insurer. 4-27 (d) An insurer may recover an assessment under this section 5-1 by: 5-2 (1) reflecting the assessment as an expense in a rate 5-3 filing required under this code; or 5-4 (2) charging the insurer's policyholders. 5-5 (e) An insurer that recovers an assessment under this 5-6 section from the insurer's policyholders shall provide a notice to 5-7 each policyholder of the amount of the assessment being recovered. 5-8 The notice required by this subsection may be included on a 5-9 declarations page, renewal certificate, or billing statement. The 5-10 commissioner by rule may adopt a form for providing notice under 5-11 this subsection. 5-12 (f) The comptroller shall credit assessments collected under 5-13 this article to the volunteer fire department assistance fund 5-14 created under Section 614.074, Government Code. 5-15 Sec. 4. RULES; COOPERATION. (a) The comptroller and the 5-16 commissioner shall adopt rules as necessary to implement this 5-17 article. 5-18 (b) The comptroller and the department shall cooperate as 5-19 necessary to implement this article. 5-20 Sec. 5. EXPIRATION. This article expires September 1, 2011. 5-21 SECTION 3. (a) This Act takes effect July 1, 2001, if it 5-22 receives a vote of two-thirds of all the members elected to each 5-23 house, as provided by Section 39, Article III, Texas Constitution. 5-24 (b) If this Act does not receive the vote necessary for 5-25 effect on July 1, 2001, this Act takes effect September 1, 2001. 5-26 (c) The director of the Texas Forest Service may not grant a 5-27 request for assistance under Subchapter F, Chapter 614, Government 6-1 Code, as added by this Act, before September 1, 2002. 6-2 (d) The comptroller of public accounts shall make the first 6-3 assessment under Article 5.102, Insurance Code, as added by this 6-4 Act, in 2002. _______________________________ _______________________________ President of the Senate Speaker of the House I certify that H.B. No. 2604 was passed by the House on April 25, 2001, by a non-record vote. _______________________________ Chief Clerk of the House I certify that H.B. No. 2604 was passed by the Senate on May 17, 2001, by the following vote: Yeas 30, Nays 0, 1 present, not voting. _______________________________ Secretary of the Senate APPROVED: __________________________ Date __________________________ Governor